News

Developer accepts reduced refund from Atherton

Deal settles lawsuit over road-impact fees

The town of Atherton will pay a Menlo Park development firm $72,500 to settle a lawsuit over road-impact fees -- a sum that is $225,500 less than the company originally sought last year when it launched its legal fight against the town.

The City Council voted on Aug. 17, in closed session, to accept the terms of a proposed agreement with Pacific Peninsula Group (PPG), but the town wouldn't disclose those terms until PPG officially accepted them. That happened Sept. 8, when PPG principal Steve Ackley signed the document.

Each party will pay its own attorneys' fees, according to the agreement.

Although the development company originally sought $298,000 from the town, that figure had been lowered to about $215,000 during the discovery phase of the litigation process, the town's attorney for the case, Leah Castella, told the Almanac in March.

Pacific Peninsula Group, which has built numerous homes in Atherton over the years, sued the town after the council agreed to refund a portion of road-impact fees paid by builders before the town discontinued the fee in late 2009. That decision, which divided the council at the time, was based on controversy over the fee's legality.

Road-impact fees are charged by many California cities to pay for damage to roads caused by heavy equipment used in home and commercial construction. The question of whether the fees are legal is yet to be resolved, but just weeks after the council's July 2010 decision to partially refund them to builders meeting certain criteria, PPG sued to force the town to refund the fees it paid in their entirety.

The agreement "should not and shall not be construed as an admission or concession of any liability, expressed or implied, or that any of the Parties have violated any laws or otherwise acted wrongfully in any manner or fashion," the signed document says. "The Parties have entered into this (agreement) in order to achieve peace and to resolve and settle all disputes and potential disputes between them."

Posted by John P Johns
a resident of another community
on Sep 12, 2011 at 5:11 pm

In this case I don't believe the plaintiff deserved a dime. Having said that, the way the Town dealt with this case has a familiar ring. The Town's paid out tens of thousands of taxpayer dollars while disclaiming responsibility for any wrongdoing.

Posted by Mike McPherson
a resident of Atherton: other
on Sep 14, 2011 at 5:25 pm

While this outcome may not be perfect, Atherton looks to be in a position to save in excess of well over half a million dollars over what the Council was prepared to refund in the spring of 2010, based on the recommendation of a developer in town. A few of us spoke up at Council meetings, and a far less generous refund plan was approved. In my opinion, Jerry Carlson, who participated in a number of meetings with the city attorney, city manager, finance director and others, deserves considerable credit for studying the issue and saving the town money.

Posted by Are you kidding?
a resident of Atherton: West Atherton
on Sep 14, 2011 at 5:32 pm

Mike, are you kidding? Jerry Carlson voted to give all the money back. Only by Kathy McKeithen and Jim Dobbie refusing to budge on the super-majority vote, and delaying the refund until the public took notice, did any groundswell develop to curtail the refund. If it had been up to Jerry Carlson, a 100% refund would have been made. Let's give credit where credit is due.

Posted by John P Johns
a resident of another community
on Sep 15, 2011 at 8:34 pm

There was a time when Jerry Carlson demonstrated leadership. However, sadly that time has long since passed. Jerry Carlson clamored for the clean up of the building Department in 2005 an 2006.

I suspect it wasn't leadership that Jerry Carlson was exhibiting when he tried so hard to broker a deal with Steve Ackley. I suspect it was self-interest.

It widely believed that Mr. Carlson could not have gotten re-elected without Elizabeth Lewis' help. Brokering a deal on behalf of Ms. Lewis' friend and patron, Mr. Ackley was a sure fire way for Mr. Carlson to get the support he needed.

Mike McPherson says Mr. Carlson deserves credit. I disagree, I think Mr. Carlson's dealings was nothing more than another example of self-dealing that the Council has become famous for.

Posted by Carlson deserves credit
a resident of Atherton: other
on Sep 19, 2011 at 10:12 am

Jerry Carlson deserves Credit.

Had the town lost the PPG lawsuit it would have had to pay the legal fees for both sides plus the settlement or approximately $500,000. It would have also opened the doors for more claims and possible fines from the state.

The town had been advised that the Road Impact fee was questionable as far back as 2006 when Steve Westley confronted the town on a $90,000.00 fee to Off Haul dirt from his property.

The council rescinded the Off Haul fee and refunded all funds collected. It waited four years to look at the Road Impact Fee, while still collecting the fee.

Last year the council was finally challenged on the Road Impact Fee and eliminated the fee before a lawsuit was filed. The council debated how far to go back with refunds. Some said there was a libality to refund as far back as 2006, when the town was first advised of the Road Impact Fee others argued that the state only requires the refunding of the last year of the fee.

Carlson sought a compromise that would allow the town to keep as much as possible of the fees collected without a lawsuit, increased refunds, and fines.

His work laid a foundation to resolve the issue without it going to court.

Posted by Carlson deserves to resign
a resident of Atherton: other
on Sep 19, 2011 at 11:30 am

Totally revisionist history above.

Many communities in California charge a road impact fee. It's not illegal. Los Altos is one very close community that is managed well and charges one. It has many of the same developers building high-end homes that Atherton does! The illegality of the road impact fee is a fiction created by the developers who unduly influence Atherton's government through their puppets Jerry Carlson and Elizabeth Lewis.

IF, and that's an IF, the Atherton road impact fee was too high, the solution was simple. Roll back the fee to a supportable level (not eliminate it), and refund the overcharge.

But Carlson wanted to give it all back. The FACTS are his votes last year proved this. Carlson also wanted to eliminate the road impact fee entirely.

The FACT is the recent layoff of the building and public works departments are directly Jerry Carlson's fault for eliminating this critical source of revenue to Atherton.

We need a council member who can do more than advance his wife's agenda of making our park a tribute to her son. It's time for Carlson to go.

Posted by mike mcpherson
a resident of Atherton: other
on Sep 22, 2011 at 12:45 pm

It is a FACT that Jerry Carlson helped initiate, and participated in, a number of meetings with various city employees, as well as a representative of the development community, to negotiate the vastly reduced fee reimbursement that the Council ultimately approved. I know this is a FACT because I was involved in those meetings.

After the Council voted to give back the money as they initially did, the "refusal to budge on the supermajority vote" would not, in the opinion of at least two attorneys with whom i have spoken, allowed the town to avoid paying the fee back. Civil litigation would have ensued, and likely the Town would have been ordered to honor the Council's earlier refund vote, and utilize whatever funds at its disposal.